Also known as a digital wallet, a crypto wallet is a simple algorithm programmed to store multiple currencies and is basically used in the cryptocurrency exchanges. The wallets are operated using two types of security keys such as a public key and a private key that interacts with the blockchain network in order to help traders for buying, selling, and storing cryptocurrencies on the exchange platforms.
To trade with cryptos, the wallets are quite essential and there are two types of wallets that are used in the exchanges, hot and cold wallets. By obtaining a wallet you are authorized for Bitcoin trading and even get the ability to send or receive Bitcoins or other cryptocurrencies.
Working principle of a crypto wallet –
A discussed above a crypto wallet serves the purpose the same as a wallet used to store cash but things are slightly different from crypto wallets provided by the HotBTC cryptocurrency trading platform. These wallets work on the principle of blockchain technology and the coins are not physically stored into the wallets. Cryptocurrencies being a virtual form of money do not exist in any physical form, instead here private and public keys are used to keep control over the funds that are stored in the wallets.
The wallet has an address which is as simple as having a bank account number, and you can provide the account number to people wanting to transfer cash to your bank account. With crypto wallets, the principle is the same but in its case, you only provide your wallet address and every wallet has its own address. This means that there are no chances that anyone else could access your funds without your consent. Moreover, the best benefit of using a crypto wallet is that you can create multiple wallet addresses. A wallet is best used for Bitcoin trading and you can create a wallet address with the combination numbers and letters using both upper and lower case letters.
Types of wallets –
- Hot wallet
This type of crypto wallet is used for storing cryptocurrencies in the
cloud platform using a trusted exchange or provider and can be accessed using a computer or a smartphone.
- Cold wallet
This wallet is basically an encrypted and portable USB device much like a pen drive that lets you download, store, and carry your Bitcoin’s for trading as per your requirements.
Benefits of using the digital wallet on a cryptocurrency trading platform for Bitcoin trading–
- Instant and automated deposits
It is now easier to send or receive cryptocurrencies to and from other digital wallets, and the HotBTCs crypto wallet does it with fewer hassles. The instant auto-deposit feature of the HotBTC wallet allows you to send, convert, and buy cryptocurrencies using your HotBTC account. This auto-deposit feature of the wallet is very secure and offers transparent transactions instantly. To make a deposit all you need to do is open your crypto wallet, enter a crypto wallet address, and confirm your wallet password.
- Detailed wallet statement
The crypto wallets used in the HotBTC crypto trading platform lets you keep track of every transaction taking place along with a detailed wallet statement. This is where all the transactional records of deposits and withdrawals are completed and stored cryptographically. Every detail is stored in real-time and can be viewed as per your requirement.
- Instant withdrawal of cryptocurrencies using two-factor authentication
The digital wallets allow for instant withdrawals using the two-factor
authentication process. Being a multi-signature crypto wallet, it uses
two out of the total three keys. The third key remains stored on a
remote server and track each and every transaction as you trade on the exchange. This is a simple two-step verification process with an added security layer in addition to your username and password.
- Displays balance in USD
The crypto wallet can display the individual balance and the estimated value of each digital asset along with the balance in USD. Using this wallet you can view any individual amount or the total estimated balance in cryptocurrency units only. Moreover, the total wallet balance can be transformed into any other form of local currencies as well.
Suiting the requirements of the traders there are different types of
crypto wallets available which can be used to store the majority of your coins and access the fund to sell or buy cryptocurrencies. The best thing is the wallets offer enhanced security measures for storing and maintaining digital currencies.